Weinhoffer v. Davie Shoring

Case: 20-30568 Document: 00516174177 Page: 1 Date Filed: 01/20/2022
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
January 20, 2022
No. 20-30568
Lyle W. Cayce
Clerk
David Weinhoffer, as liquidating trustee of Offshore Specialty
Fabricators L.L.C.,
Plaintiff—Appellant,
versus
Davie Shoring, Incorporated,
Defendant—Appellee.
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:19-CV-11175
Before Higginbotham, Southwick, and Engelhardt, Circuit
Judges.
Patrick E. Higginbotham, Circuit Judge:
David Weinhoffer and Davie Shoring, Inc., dispute the terms of an
online auction. We review whether evidence of the terms was properly
admitted. Because the district court abused its discretion by improperly
admitting evidence and taking judicial notice of the terms, we reverse the
judgment of the district court and remand this case for further proceedings.
Case: 20-30568 Document: 00516174177 Page: 2 Date Filed: 01/20/2022
No. 20-30568
I.
Offshore Specialty Fabricators L.L.C. (“OSF”) was subject to a
Chapter 11 bankruptcy plan administered by liquidating trustee David
Weinhoffer. OSF contracted with Henderson Auctions to auction off a large
housing module. Henderson advertised and hosted the auction on its website,
but when auction participants clicked on the link to bid, they were directed
to Proxibid, a third-party website, where they could view the auction’s terms
and conditions and place their bids. Among these terms was a term declaring
that bidders would be liable for only 20% of the bid price in the event of a
breach of contract. Instead of using the website, Warren Davie, Davie
Shoring’s principal, placed the winning bid of $177,500 on a phone call with
a Henderson employee. After the auction concluded, Davie Shoring refused
to pay for the module when it proved difficult to remove from storage.
Weinhoffer brought suit as OSF’s liquidating trustee, seeking
recovery of Davie Shoring’s bid of $177,500. Weinhoffer’s breach of sale
contract claim was tried in a bench trial. Davie Shoring argued that the terms
of the auction limited the damages to 20% of the winning bid, here $35,500.
Davie testified that he read the auction terms, including the 20% damages
limitation, on Henderson’s website before bidding. At trial, Davie Shoring
introduced the auction terms and conditions in two forms: (1) as an internet
printout labeled “Exhibit 41” and (2) as an archived webpage from a website
known as the “Wayback Machine,” an online archive of web pages. 1
Davie Shoring introduced Exhibit 41 through the testimony of Renita
Martin, Henderson’s office manager. However, Martin testified that Exhibit
1
“The Wayback Machine is an online digital archive of web pages. It is run by the
Internet Archive, a nonprofit library in San Francisco, California.” Mojave Desert Holdings,
LLC v. Crocs, Inc., 844 F. App’x 343, 346 n.2 (Fed. Cir. 2021).
2
Case: 20-30568 Document: 00516174177 Page: 3 Date Filed: 01/20/2022
No. 20-30568
41 had not been in Henderson’s possession “because the auction was no
longer up on [Henderson’s] website.” Instead, Martin searched for the
auction terms on Proxibid’s website to produce them in response to the
subpoena. Martin explained that even if the auction page were still live on
Henderson’s website, the terms and conditions would only be accessible if
one clicked on the link to Proxibid’s separate website.
Weinhoffer objected to Exhibit 41, contending that it was irrelevant,
unauthenticated, and hearsay. The district court ruled that Martin had
properly authenticated Exhibit 41 because, although she was not its author,
her job description indicated that she was a proper custodian. The district
court also ruled that Exhibit 41 was within one of Federal Rule of Evidence
803’s hearsay exceptions.
Davie Shoring’s counsel requested that, in addition to admitting
Exhibit 41, the district court take judicial notice of the same terms in an
archived version of the Proxibid webpage, available on the Wayback
Machine. The district court took judicial notice of the terms and conditions
as they appeared in the archived webpage, explaining that the archived
webpage was a “source[] whose accuracy cannot reasonably be questioned”
under Federal Rule of Evidence 201.
The district court relied on Exhibit 41 to determine that the “Special
Terms” provided “plaintiff’s sole and exclusive remedy” for breach,
limiting Weinhoffer’s recovery to 20% of Davie Shoring’s bid. The district
court entered judgment for Weinhoffer in the amount of $35,500 plus costs.
Weinhoffer timely appealed.
II.
“We review evidentiary rulings only for abuse of discretion and will
reverse a judgment on the basis of evidentiary rulings only if the challenged
3
Case: 20-30568 Document: 00516174177 Page: 4 Date Filed: 01/20/2022
No. 20-30568
ruling affects a substantial right of the party.” 2 We apply the same standard
when reviewing a district court’s use of judicial notice. 3 “In a bench trial,
reversal is only warranted if all of the competent evidence is insufficient to
support the judgment, or if it affirmatively appears that the incompetent
evidence induced the court to make an essential finding which it otherwise
would not have made.” 4
III.
We first address whether the admission of Exhibit 41 was proper
under the Federal Rules of Evidence. As Exhibit 41 was not properly
authenticated, we reverse the district court.
A.
Authentication is a condition precedent to admissibility. 5 The party
offering an exhibit must produce evidence sufficient to support a finding that
the item is what the proponent claims it to be. 6 Where a website or electronic
source is concerned, “testimony by a witness with direct knowledge of the
source, stating that the exhibit fairly and fully reproduces it, may be enough
to authenticate.” 7 Although a witness need not be a document’s author to
authenticate it for purposes of Rule 901, 8 we have observed that a witness
2
S. Pac. Transp. Co. v. Chabert, 973 F.2d 441, 448 (5th Cir. 1992).
3
Ctr. for Biological Diversity, Inc. v. BP Am. Prod. Co., 704 F.3d 413, 422 (5th Cir.
2013).
4
S. Pac. Transp. Co., 973 F.2d at 448.
5
United States v. Jackson, 636 F.3d 687, 693 (5th Cir. 2011) (citing Fed. R. Evid.
901(a)).
6
Id.7
Thompson v. Bank of America Nat. Ass’n, 783 F.3d 1022, 1027 (5th Cir. 2015).
8
United States v. Duncan, 919 F.2d 981, 986 (5th Cir. 1990).
4
Case: 20-30568 Document: 00516174177 Page: 5 Date Filed: 01/20/2022
No. 20-30568
attempting to authenticate online content as evidence was unlikely to have
the requisite direct knowledge where that content was created and
maintained by a third party. 9
Martin’s testimony is the only way Davie Shoring attempted to
authenticate Exhibit 41. However, Martin had no personal knowledge of the
terms applicable to the auction. Martin had to search a third party’s website
to obtain the terms because Henderson did not have them in its possession.
Moreover, Martin’s testimony indicates that she was unfamiliar with
Proxibid’s website and that she needed the assistance of a colleague to locate
the terms. Thus, Martin’s authentication testimony only amounts to an
affirmation of her memory that Exhibit 41 is what she found on the internet.
Although the standard for authentication is low, Martin had
inadequate direct knowledge to authenticate Exhibit 41. Davie Shoring could
have avoided running afoul of Rule 901 by calling someone with more direct
knowledge of Proxibid’s recordkeeping. The district court abused its
discretion by relying on inadmissible evidence when it reduced Weinhoffer’s
damages; we accordingly reverse its ruling.
B.
Although Exhibit 41 was inadmissible due to improper authentication,
we write further for the benefit of the parties and the district court following
remand. At trial, Weinhoffer’s counsel also objected to Exhibit 41 as hearsay.
Hearsay evidence is generally inadmissible, but Rule 803 provides exceptions
to this prohibition. 10 The district court ruled that Exhibit 41 “fits under
Federal Rule of Evidence 803” because Martin was a proper custodian who
9
Thompson, 783 F.3d at 1027.
10
Fed. R. Evid. 803.
5
Case: 20-30568 Document: 00516174177 Page: 6 Date Filed: 01/20/2022
No. 20-30568
gave testimony at trial regarding the exhibit’s origins. The district court did
not specify which exception applied, but the business records exception in
Rule 803(6) is the only exception Davie Shoring cites on appeal.
Rule 803(6)(D) requires that a custodian or qualified witness testify as
to an exhibit’s ability to qualify as a business record. Weinhoffer argues that
Martin was not a proper custodian or qualified witness for Exhibit 41. This
Court has explained that a “qualified witness is one who can explain the
record keeping system of the organization and vouch that the requirements
of Rule 803(6) are met.” 11 This requires the witness to be “familiar with the
record keeping procedures of the organization” 12
Martin is not a proper custodian or qualified witness as to Exhibit 41
as a business record. Martin was Henderson’s employee, but Henderson did
not have custody of the record contained in Exhibit 41; Proxibid did. Martin
was not familiar with Proxibid’s record keeping procedures and cannot testify
that the other requirements of the Rule 803(6) are met. Because the district
court’s ruling that Exhibit 41 “fit under 803” was a legal error, it was an
abuse of discretion. 13
IV.
In addition to admitting Exhibit 41 into evidence, the district court
took judicial notice of the terms from an archived webpage on the premise
that the Wayback Machine constitutes a source whose accuracy cannot
reasonably be questioned as required by Rule 201(b)(2). None of our sister
circuits have squarely addressed whether archival internet sources like the
11
United States v. Iredia, 866 F.2d 114, 120 (5th Cir. 1989) (per curiam).
12
United States v. Brown, 553 F.3d 768, 793 (5th Cir. 2008) (internal quotations
omitted).
13
Marlin v. Moody Nat. Bank, N.A., 533 F.3d 374, 377 (5th Cir. 2008).
6
Case: 20-30568 Document: 00516174177 Page: 7 Date Filed: 01/20/2022
No. 20-30568
Wayback Machine possess the “high degree of indisputability [that] is the
essential prerequisite” of judicial notice. 14 A brief Federal Circuit order
denied a motion to take judicial notice of content from the Wayback Machine
because it was not first offered to the district court. 15 Many district courts
have since relied on that Federal Circuit decision to justify taking judicial
notice of an archived webpage, even though the Federal Circuit did not hold
that taking judicial notice of archived information was appropriate. 16
However, other district courts have held that evidence from the Wayback
Machine “is not so reliable and self-explanatory that it may be an appropriate
candidate for judicial notice.” 17 In this circuit, a district court found that
documents from the Wayback Machine were not appropriate for judicial
notice, citing the Wayback Machine’s terms of use which disclaim any
guarantees of accuracy regarding content stored there. 18
A more recent Federal Circuit decision discussed whether Wayback
Machine content was publicly accessible. 19 At issue was whether an exhibit
was authenticated as identical to the document viewed by the patent
14
Fed. R. Evid. 201 (advisory committee notes to the 1972 amendments).
15
Juniper Networks, Inc. v. Shipley, 394 F. App’x 713 (Fed. Cir. 2010). Juniper cited
O’Toole v. Northrop Grumman Corp., 499 F.3d 1218 (10th Cir. 2007), but the object of
judicial notice in O’Toole was historical data actively available on the defendant’s website,
not information coming from an internet archive.
16
See e.g. Pohl v. MH Sub I, LLC, 332 F.R.D. 713, 716 (N.D. Fla. 2019); In re Methyl
Tertiary Butyl Ether (MTBE) Prod. Liab. Litig., No. 07 CIV. 10470, 2013 WL 6869410, at *4
(S.D.N.Y. Dec. 30, 2013).
17
My Health, Inc. v. Gen. Elec. Co., No. 15-CV-80-JDP, 2015 WL 9474293, at *4
(W.D. Wis. Dec. 28, 2015); see also Nassar v. Nassar, No. 3:14-CV-1501-J-34MCR, 2017
WL 26859, at *5 (M.D. Fla. Jan. 3, 2017).
18
Ward v. Am. Airlines, Inc., No. 4:20-CV-00371-O, 2020 WL 8300505, at *1 (N.D.
Tex. Oct. 16, 2020).
19
Valve Corp. v. Ironburg Inventions Ltd., 8 F.4th 1364 (Fed. Cir. 2021).
7
Case: 20-30568 Document: 00516174177 Page: 8 Date Filed: 01/20/2022
No. 20-30568
examiner and whether the exhibit could be prior art. There, the Federal
Circuit held that judicial notice of the Wayback Machine could be used to
establish that an otherwise authenticated exhibit was publicly accessible on
the webpage’s archive date as determined by a patent examiner who was
“trained and required to determine publication dates.” 20 Here, the Wayback
Machine content containing the auction terms has not been otherwise
authenticated.
Beyond the context of judicial notice, our sister circuits have allowed
district courts to rely on archived webpages where someone with personal
knowledge of the reliability of the archive service has been authenticated
pursuant to Rule 901. 21 This reliance on personal knowledge indicates that
exhibits derived from these sources are not inherently or self-evidently
reliable in the same way as documents designated as self-authenticating by
Rule 902.
Here, there was no testimony to authenticate the archived webpage. 22
Our sister circuits’ decisions that the Wayback Machine is not self-
authenticating are persuasive in the context of judicial notice. In sum, the
district court erred in taking judicial notice of the terms because a private
internet archive falls short of being a source whose accuracy cannot
reasonably be questioned as required by Rule 201.
20
Id. at 1374–75.
21
See United States v. Gasperini, 894 F.3d 482, 490 (2d Cir. 2018); Specht v. Google
Inc., 747 F.3d 929, 933 (7th Cir. 2014); United States v. Bansal, 663 F.3d 634, 667–68 (3d
Cir. 2011).
22
The Wayback Machine’s “Using The Wayback Machine” webpage instructs
users on how to request affidavits to authenticate Wayback Machine pages as “certified
records for use in legal proceedings.” See Internet Archive, Using the Wayback Machine,
http://help.archive.org/hc/en-us/articles/360004651732-Using-The-Wayback-Machine
(last visited January 20, 2022).
8
Case: 20-30568 Document: 00516174177 Page: 9 Date Filed: 01/20/2022
No. 20-30568
V.
Finally, we turn to whether these errors affected Weinhoffer’s
substantial rights. 23 The district court relied on Exhibit 41, judicial notice of
the Wayback Machine, and Martin’s testimony as the primary bases for its
decision. While the testimony of Warren Davie may have further supported
the district court’s decision, it affirmatively appears that incompetent
evidence induced the district court to make an essential finding regarding the
auction terms that it otherwise would not have made. 24 Accordingly, the
errors were not harmless and they affected Weinhoffer’s substantial rights. 25
VI.
We REVERSE the judgment of the district court and REMAND
the case for further proceedings consistent with this opinion.
23
Bocanegra v. Vicmar Servs., Inc., 320 F.3d 581, 584 (5th Cir. 2003).
24
S. Pac. Transp. Co., 973 F.2d at 448.
25
Carlson v. Bioremedi Therapeutic Sys., Inc., 822 F.3d 194, 202 (5th Cir. 2016).
9